Once upon a time, highly "creative ads" drove client and agency financial success. This is no longer the case. It's time to redefine "creativity."

What's needed? "Creative thinking to solve brand performance problems." This requires focus and a mix of consulting, technology and creative skills.

Credit: Robert Weber, The New Yorker, The Cartoon Bank

Back in the “good old days,” up to about 1990, when agencies were paid 15% commissions on a client’s media spend, and print, TV and radio were the principal media channels, the definition of “highly creative ads” was clear to everyone in the industry.

It had nothing to do with creative awards.

A highly creative ad was an ad that was so good (and so commercially successful) that clients ran it over and over again, exploiting its Big Idea.

Each time it ran, it generated a 15% commission from its media spend.

Agencies loved highly creative ads. They were incredibly profitable. Highly creative ads eliminated the need to incur the investment costs of developing new campaigns that would only be paid for when the ads finally ran in paid media.

New campaigns were a drag on profits.

No wonder Executive Creative Directors were obsessed about raising the level of creativity in their departments! No wonder they reviewed every single piece of creative work before it would be shown to clients. No wonder the rate of “internal rework” was high in those days. ECDs were tough on their creative teams — even tougher than their clients.

Well, it’s a different industry today.

Creatives used to do fewer than seven ads per year. Today, the figure is 200-300 per creative per year for digital / social channels, with 85% of the deliverables being “adaptations of digital / social originations.” Small stuff that changes all the time, directed at a fragmented audience. Lots of variety. Nothing particularly memorable that creates the kind of emotional connection that builds brand loyalty. Viral ads are celebrated, but they come and go and are quickly forgotten.

ECDs cannot review today’s huge volume of agency work, which is carried out by junior creatives who crank out ad banners, Instagram / Facebook posts, online videos, email pitches, keywords and content for programmatic ads — the unmemorable stuff that makes up today’s scopes of work.

Even worse, the stuff isn’t even successful in driving brand growth. Forty percent of the top fifty advertisers in the US are growing below the rate of GDP despite their massive investments in digital and social media over the past fifteen years.

The time is ripe for agency CEOs to articulate a new mission for their agencies:

“We must help our clients grow their brands,” agency CEOs should say. “This means that we need to upgrade our skills, along with improving the quality of the scopes of work that we work on.”

This statement is more meaningful than “we need to improve our creativity and our new business wins,” which is the usual CEO litany.

The fly in the ointment, though, are the holding companies (other than Publicis), which care more about “making the numbers” than seeing or directing a transformation of agency missions and skills.

Holding companies routinely force agency downsizings to “make the numbers,” liquidating the most expensive agency executives whose skills and experiences are required for the transformed agency.

Standing in the wings and watching this unfold are independent agencies, particularly those who are owned by private equity firms — and the major management consulting firms, like Bain, BCG and McKinsey, who are making inroads into Marketing in an effort to help CMOs become more successful at driving brand growth.

There will be winners and losers in this strategic battle, and AI will become an accelerant as it replaces junior folks in agencies.

Will agencies have anything left once AI takes out the junior “doers” and their man-hour fees?

Time is running out for Madison Avenue. Creativity needs to be broadly defined as “creative thinking to solve brand performance problems.” Agencies need to adopt this formulation as the foundation for their operations and training.